Position Updates

I am traveling for a few weeks but still wanted to provide a brief review of material changes to personal accounts this week. Newly added:

  • $CF  I am long the Oct 275/285/290/300 Call Fly
  • $GMCR  I am long the Oct 140 Calls
  • $OIH  I am long the Oct 24w/Oct 45/43 Diag Put Cal
  • $CAMP
  • $CALM

Exits or adjustments to existing positions:

 

China Finance Online

I have a trade in the 50/50 Basket for $JRJC and thought I would give a brief breakdown on the status. Here are the specifics:

September 10/9/7.5/6 Bear Risk Reversal Put Spread. A mouthful lol

I am long stock at $8.07 (hedge for the short Calls)

Here is a breakdown of the September Options pieces:

I am short the $10 Calls
I am long the $9 Puts
I am short the $7.5 Puts (1/2 size)
I am short the $6 Puts (1/2 size)

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Earnings Trade Ideas

I had 3 stocks that I reviewed yesterday for Earnings this morning & here is a look at what I considered:

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Per my “1st week rule” – after monthly Options expiry i don’t do Earnings trades in the 1st week for personal accounts unless the stock has weekly options – I did not do a trade in $DKS or $TJX. I did initiate the trade in $HD.

All 3 trade ideas are performing well with the Bullish side winning in $DKS.

Position Updates

A lot of my focus was on managing existing positions given it was August Options expiration week. However, here are a few newly added that survive to the weekend:

  • $DRC  I am long the September $70 Calls at $1.83
  • $GPRE  I am long the September $45 Calls (the short August pieces went poof)
  • $PEIX  I am long stock with a September 22/21/17 Collar PS
  • $BITA  I am long stock with a September 75/75/65 Collar PS
  • $JCP  I am long the January 2015 $10 Straddle, short the August 29 weekly $9.50 Straddle
  • $RRGB  I am long stock at $49.90 and short the September $50 Straddle for a $5.35 credit

Exits this week:

Submarine Basket (no material changes):

50/50 Basket:

Earnings:

Here is the Summary:

Positions_08162014

Different ways to participate

I have been trading $ICPT this week (was a recent 50/50 Basket member as well) and found myself today evaluating my short stock trade as it approached the $300 level. I often will use a Bear Collar to protect a short stock position but decided to take a different path to participate in the “fade”.

This is the path I chose:

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I covered the short stock piece (frees up a lot of margin) & switched to a long August 290/265 Put Spread (just under a $5 cost, debit). A solid 5:1 risk reward.

An Earnings Trade in Fossil

I am a big fan of Option Ratio trades for a variety of reasons (like low-cost, flexibility on exit, etc) and I did such a trade in $FOSL today for Earnings. First, a look at the specifics:

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Let me break this down:

I am long the August $102 Puts
I am short the $97 & $93 Puts
I am short the $111 Calls
This trade was done for EVEN
This trade takes margin (at least until the upper & lower short pieces are closed)

Another way to look at this trade structure:

I am long the August 102/97 Put Spread
I am short the August 111/93 Strangle

In after hours price is at $99 so the Put Spread piece is in play (capped at $5)

Earnings Trades – a Simple Approach

part of the Simple Approach series

One way to keep it simple for Earnings trades is to use Options. Pick a bias – bullish or bearish – and buy the appropriate Call(s) or Put(s).

I track trade ideas each week – whether I do a trade or not – and this data collection includes several different trade strategies. The purpose of this is to have data I can review later including strategy comparisons.

For this afternoon, here are 5 stocks that reported Earnings. I would approach this as a “Basket of stocks” and would have taken a Bullish stance on all 5. Here are my super deluxe notes:

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One additional stock I would add is $SCTY – buying the August 08 weekly $76 Calls (closed at $2.80 today).

Earnings trade idea on Barnes & Noble

a Look Both Ways approach

Ticker: $BKS

Long July 21/22/23 1×2 Split Call Ratio
Long July 20/19/18 1×2 Split Put Ratio
Trade cost right now: $.16 debit
Takes margin

As always, you will need to be prepared to hedge with stock if price flirts with the $18 or $23 level. This trade will be capped at a $1 profit (minus trade cost) if price moves past $19 or $22.

The Basket of stocks

I discuss frequently the various baskets of stocks that I manage & often get questions regarding them so I thought I would give a brief list here:

Earnings
This basket of stocks is for trades related to Earnings reports each quarter. These can be pre & post Earnings trades

Submarine Basket
I buy pullbacks in this basket & prefer stocks with Options. I often buy partial position & then sell Straddles/Strangles to build the position

Fab 5
I buy stocks (sometimes use only Options but rare) that are headed to test the $100 level

50/50
I short stocks that are 50% above the 50 SMA